INDEX OF SERVICE PRODUCTION

Rail Transport

Variables:

Passenger Services: Passenger kilometer travelled under different classes, which are
:AC First Class, AC two tier sleeper, AC three tier sleeper, AC Chair car, First class
(Mail 0r express), Sleeper class (Mail or express/ordinary), Second class (Mail or
express/ordinary).

Freight: Tonne Kilometers of nine major categories of commodities transported (Coal,

Raw Material, Pig-Iron and finished steel, Iron Ore, Cement, Food grains, Fertilizers,
Minerals, Mineral Oils and Other Commodities). These nine categories together
accounted for 95% of total originating tonnes during 2004-05.

Weighting Diagram:
The average of the total revenues earned during three years 2003-04 to 2005-06, has
been taken as reference weight. Thus the base notionally corresponds to the year
2004-05. The details of the weighting diagram are given in Table-1.

Table 1: Weighing diagram for Passenger and Freight transport services by Rail

Passenger Freight
Sl.no Class Weight Weight Commodity Sl.no
1 A-1 0.370 27.777 Co 1
2 A-2 2.289 3.073 Rm 2
3 A-3 2.242 3.392 Pf 3
4 A-C 0.616 3.787 Io 4
5 1-M 0.660 5.337 Ce 5
6 S-M 7.880 6.606 Fg 6
7 S-O 0.082 2.842 Fe 7
8 2-M 8.536 6.090 Mo 8
9 2-O 8.659 9.762 Oc 9
All Classes 31.334 68.666 All Commodities

Abbreviations used:
A-1 A.C First Class Co Coal
A-2 A.C Sleeper Rm Raw material
Pig Iron & Finished
A-3 A.C 3-Tier Pf Steel
A-C A.C Chair Car Io Iron Ore
1-M 1st Class - Mail Ce Cement
S-M Sleeper Class - Mail Fg Food Grains
S-O Sleeper Class - Ordinary Fe Fertilizers
2-M 2nd Class - Mail Mo Mineral Oils
2-O 2nd Class - Ordinary Oc Other Commodities

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Methodology:

All the classes of passenger services and the nine major commodity groups for freight
services (see Table 1) form part of the item basket of ISP.

The monthly data is available on passenger kilometers by class of travel and freight
tones by type of commodity. The index has been compiled using the following formula

𝑄𝑄𝑄𝑄𝑄𝑄
∑W io 𝑄𝑄𝑄𝑄𝑄𝑄
𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼 =
∑W io *100
R

Where
Q it = value of the variable for item i(i=1,2,……9) in period t
Q i0 = value of the variable for item i(i=1,2,……9) in base period
W io = weight of item i in the base period

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Air Transport

Variables:
Passenger Services: Passenger kilometers travelled by National Carriers (Air India,
Air India Express, Alliance, Indian Airlines) and private Scheduled Domestic Airlines
(Jet Airways, Jetlite, Spicejet, Kingfisher, Paramount, Go Air, and Indigoetc.)

Freight Services:Tonne Kilometers of Cargo transported including freight, mail and

excess baggage by Natinal Carriers and Private Scheduled Domestic Airlines.

Weighting diagram:
The percentage shares in the revenue for the year 2006-07 of passenger and
freight services constitute the respective weights as revised in year 2013. In the
data on tonnes Km performed by Airlines, PAX is added, which is weight of the
passengers carried. The internationally accepted value of PAX is 110 kg which
includes 75 kg as average weight of passenger, average of 30 kg for
accompanied luggage and 5 kg for excess baggage. Out of this only the portion
of excess baggage has been included in tones of freight carried as there is
separate account of revenue collected on account of excess baggage.

Table 2: Weighing diagram for Air Transport Services:

Type of Service All Services

National Carriers 61.12
Private Scheduled Domestic Airlines 38.88
All scheduled Airlines 100

Methodology:
Air transport services are broadly divided into the following two categories;
(a) Passenger traffic services(Scheduled)
(b) Freight/cargo traffic services

The average monthly passenger-kilometers and tones-kilometers transported

during the base year 2004-05 have been computed first as the value of the
variable for the base year. The monthly indices for both types of services are
computed based on the monthly passenger-kilometers transported and tones-
kilometers transported with respect to their respective base period average
figures. The overall ISP for air transport is computed as the weighted average of
the two above indices, the weights being respective gross operating revenues
(Laspeyre’s fixed base index).

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 𝑄𝑄𝑄𝑄𝑄𝑄
∑Wio 𝑄𝑄𝑄𝑄𝑄𝑄
𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼 =
∑Wio *100
R

Where
Q it = value of the variable for item i(i=1,2,……9) in period t
Q i0 = value of the variable for item i(i=1,2,……9) in base period
W io = weight of item i in the base period

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PostalServices

Variables:

• Unregistered Postal Traffic

• Registered Postal Traffic
• Unregistered Foreign Traffic
• Registered Foreign Traffic
• Premium Product Services Traffic.

The services like Financial Services, Pension Payments, Sale of Forms,

Collection of Water, Telephone Bills etc. under retail post office services are
kept out of the purview of this Index as they are either covered in different
industry divisions of OECD manual or they do not conform to CPC classification.
However, though OECD manual suggests that courier activities other than
national post activities should be covered for the index calculation, it is observed
that data related to postal services provided by private operators /couriers are
not collected and hence not available. These activities are also kept outside the
purview till a system is developed for capturing the data for such services on
regular basis and with desired quality.

Weighting Diagram
Total revenue earned by the DOP in 2004-05 (base year of postal services
index) was Rs. 44318.47 million out of which 89.6% i.eRs. 39700 million was
earned by the traditional postal services.

The revenue of the following groups of services in the base year 2004-05 has
been taken as the weight. The details of the weighting diagram are given in
Table-3.

Table 3: Weighting diagram for Postal Services

Services Weight
Unregistered Postal Services 72.29
Registered Postal services 8.94
Un registered foreign postal
7.68
services
Registered foreign postal
0.67
services
Premium product services 10.41

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Methodology:
Laspeyers formula has been used to compile the index. Weighted average of
Item wise price relatives have been computed to arrive at group level indices.
Group level indices have been combined to compile a composite index standing
for the all India postal service index. Due to non-availability of quarterly/monthly
data index has been computed on Annual basis.

Group Index:

∑𝑚𝑚 𝑖𝑖 𝑖𝑖 𝑖𝑖
𝑘𝑘=0 0 𝑊𝑊 𝑘𝑘 𝑡𝑡 𝑄𝑄𝑘𝑘 � 0 𝑄𝑄𝑘𝑘
Ii= x 100
∑𝑚𝑚 𝑖𝑖
𝑘𝑘=1 0 𝑊𝑊 𝑘𝑘

Composite Index:

∑𝑛𝑛𝑖𝑖=1 𝑊𝑊𝑖𝑖0 I 𝑖𝑖
I= X 100
∑𝑛𝑛𝑖𝑖=0 𝑊𝑊𝑖𝑖0

Where
Ii = Index of Group variable i (i=1,2,………….m)
i Q kt = value of item k on variable i (k=1,2,……n) in period t
i Q k0 = value of item k on variable i (k=1,2,……n) in base period
i W ko = weight of the item k of the group variable I in the base year
W io = Weight of the group variable in the base year